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Which Factors Affected Flotek Industries in 3Q16?

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Flotek Industries’ revenue by segment

Let’s take a look at Flotek Industries’ (FTK) segment performance in 3Q16. Revenues for its Energy Chemistry Technologies segment, which accounted for 61.0% of its revenues, fell 25.0% in 3Q16 over a year ago. The segment’s operating income fell 56.6%.

FTK’s Consumer and Industrial Chemistry Technologies segment was a positive surprise in 3Q16. It witnessed 39.0% revenue growth over 3Q15. Its operating income posted a ~41.0% improvement during the same period.

Read Market Realist’s series Will Fundamentals Curb Flotek Industries’ Spectacular Run? for an in-depth look at Flotek Industries.

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Factors affecting FTK’s 3Q16 results

  • Sales volumes for FTK’s nano-Fluid CnF technologies products fell compared to a year ago.
  • FTK had lower completion activity due to lower upstream activity.

What can drive FTK in the future?

  • In July 2016, FTK acquired International Polymerics for $7.9 million. The acquisition is expected to benefit FTK’s chemistry logistics operations in the Permian basin in Texas.
  • FTK signed a cooperative agreement with Anton Oilfield Services Group in China. Under the agreement, Anton will have exclusive rights to use certain Flotek chemistry products in China, the Middle East, Central Asia, and the Americas in exchange for certain purchase commitments.
  • FTK is collaborating with YPF (YPF), an Argentina-based upstream producer, for oilfield and industrial chemistry applications.

Next, let’s take a look at Flotek Industries’ returns.

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